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NIBAF Foreign Trade practice questions

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Question 1Regulatory and Legal Framework for Foreign Trade

Which statute is the principal law empowering the State Bank of Pakistan to regulate dealings in foreign exchange in Pakistan?

  1. The Banking Companies Ordinance, 1962
  2. The Imports and Exports (Control) Act, 1950
  3. The Customs Act, 1969
  4. The Foreign Exchange Regulation Act, 1947 Correct answer.

Explanation

The Foreign Exchange Regulation Act, 1947 is the parent exchange control statute; it restricts dealings in foreign exchange and empowers the State Bank to grant permissions and issue directions. The Banking Companies Ordinance deals with licensing and regulation of banks, the Imports and Exports (Control) Act with trade policy orders, and the Customs Act with duties and clearance.

Question 2Regulatory and Legal Framework for Foreign Trade

Under Pakistan's exchange control framework, an 'Authorized Dealer' is best described as:

  1. A customs clearing agent licensed by Pakistan Customs to clear import and export consignments
  2. A trading house registered with the Ministry of Commerce for the export of goods
  3. A bank authorised by the State Bank of Pakistan to deal in foreign exchange Correct answer.
  4. A money changer permitted only to purchase foreign currency notes from travellers

Explanation

An Authorized Dealer is a bank, or a branch of a bank, authorised by the State Bank under the exchange control framework to conduct foreign exchange business, including opening letters of credit and handling export and import documents. Clearing agents, trading houses and restricted money changers do not hold that authority.

Question 3Regulatory and Legal Framework for Foreign Trade

The Import Policy Order, which sets out the conditions governing the import of goods into Pakistan, is issued by:

  1. The Federal Board of Revenue
  2. The Securities and Exchange Commission of Pakistan
  3. The Ministry of Commerce Correct answer.
  4. The State Bank of Pakistan

Explanation

The Import Policy Order is issued by the Ministry of Commerce under the Imports and Exports (Control) Act, 1950, and it regulates what may be imported and on what conditions. The State Bank issues exchange control instructions, while the Federal Board of Revenue administers customs and tax law.

Question 4Regulatory and Legal Framework for Foreign Trade

Which law is the principal statute governing the levy and collection of customs duties and the clearance of goods at Pakistan's borders?

  1. The Income Tax Ordinance, 2001
  2. The Customs Act, 1969 Correct answer.
  3. The Sales Tax Act, 1990
  4. The Federal Excise Act, 2005

Explanation

The Customs Act, 1969 consolidates the law relating to the levy and collection of customs duties, the clearance of imported and exported goods, warehousing and related enforcement matters. The Sales Tax Act, Income Tax Ordinance and Federal Excise Act deal with other taxes.

Question 5Regulatory and Legal Framework for Foreign Trade

Documentary credits opened by banks in Pakistan are normally made subject to UCP 600, which is issued by:

  1. The World Trade Organization
  2. The International Monetary Fund
  3. The Bank for International Settlements
  4. The International Chamber of Commerce Correct answer.

Explanation

UCP 600 is the Uniform Customs and Practice for Documentary Credits published by the International Chamber of Commerce and incorporated into credits by agreement of the parties. It sets out the rules on issuance, examination of documents and the obligations of banks.

Question 6Regulatory and Legal Framework for Foreign Trade

Under Pakistan's exchange control requirements, export proceeds must normally be realised and repatriated within what period from the date of shipment?

  1. 180 days Correct answer.
  2. 60 days
  3. 365 days
  4. 30 days

Explanation

Authorized Dealers must ensure that the proceeds of exports are realised and repatriated within 180 days of the date of shipment, unless a longer period has been specifically allowed. This discipline supports the timely inflow of foreign exchange and is monitored through export reporting requirements.

Question 7Regulatory and Legal Framework for Foreign Trade

Among the documents called for under a documentary credit, which one serves as a document of title to the goods and evidences the contract of carriage?

  1. Packing list
  2. Bill of lading Correct answer.
  3. Certificate of origin
  4. Commercial invoice

Explanation

A bill of lading is issued by the carrier, evidences the contract of carriage and the receipt of goods for shipment, and functions as a document of title that enables the holder to claim the goods. The other documents evidence price, packing details or origin respectively.

Question 8Regulatory and Legal Framework for Foreign Trade

Pakistan Single Window (PSW) is best described as:

  1. A duty rebate scheme administered by Pakistan Customs for exporters of manufactured goods
  2. A forum for settling trade disputes between exporters and importers in different countries
  3. A State Bank refinance facility for financing the import of plant and machinery by manufacturers
  4. A single electronic entry point for submitting trade documents to regulatory agencies Correct answer.

Explanation

Pakistan Single Window is an electronic platform that allows traders to lodge trade-related documents and declarations once and have them processed by the several regulatory agencies involved in cross-border trade. It is intended to reduce documentary duplication, cost and clearance time.

Question 9Regulatory and Legal Framework for Foreign Trade

Under UCP 600, how many banking days following the day of presentation does a nominated bank have to examine a presentation and determine whether it is complying?

  1. Ten banking days
  2. Three banking days
  3. Seven banking days
  4. Five banking days Correct answer.

Explanation

UCP 600 gives a nominated bank a maximum of five banking days following the day of presentation to examine the documents and decide whether to honour or refuse. The period is not shortened by any requirement to act with reasonable care, but it cannot be extended by agreement in the credit.

Question 10Regulatory and Legal Framework for Foreign Trade

Under the Duty and Tax Remission for Exports (DTRE) scheme, the relief available to an exporter is:

  1. Remission of customs duty and sales tax on imported inputs used in the manufacture of exported goods Correct answer.
  2. Deferment of customs duty until the imported goods are sold in the domestic market
  3. Refund of income tax deducted at source on export proceeds
  4. Full exemption from customs duty on imported plant and machinery for setting up a new industrial project

Explanation

DTRE allows exporters to import inputs free of customs duty and sales tax where those inputs are consumed in the manufacture of goods that are subsequently exported. The concession is conditional on the exported output being accounted for within the prescribed period.

Question 11Regulatory and Legal Framework for Foreign Trade

The Export Facilitation Scheme, 2021, administered by Pakistan Customs, was introduced mainly to:

  1. Introduce a single window for submission of trade documents to regulators
  2. Replace the Export Policy Order with a new licensing regime for exporters
  3. Consolidate and simplify the duty- and tax-free import of inputs for exporters Correct answer.
  4. Provide subsidised credit to exporters through the State Bank of Pakistan

Explanation

The Export Facilitation Scheme, 2021 brings together and simplifies earlier arrangements, such as DTRE and manufacturing bonds, under which exporters may import inputs free of duty and taxes subject to export of the finished goods. It is a customs facilitation measure rather than a trade policy order or a credit scheme.

Question 12Regulatory and Legal Framework for Foreign Trade

Pakistani producers believe that a foreign supplier is dumping goods in Pakistan below normal value and causing material injury to the domestic industry. The body that investigates the complaint and recommends anti-dumping duties is:

  1. The Competition Commission of Pakistan
  2. The State Bank of Pakistan
  3. The Federal Board of Revenue
  4. The National Tariff Commission Correct answer.

Explanation

Under the anti-dumping legislation, the National Tariff Commission conducts the investigation into dumping, injury and causal link, and recommends the imposition of anti-dumping duties. The duty itself is then notified and collected through the customs machinery.

Question 13Regulatory and Legal Framework for Foreign Trade

Under the Contract Act, 1872, an agreement whose object is unlawful is:

  1. Valid if it is supported by lawful consideration
  2. Void Correct answer.
  3. Enforceable against the buyer only
  4. Voidable at the option of the aggrieved party

Explanation

The Act provides that where the consideration or object of an agreement is unlawful, the agreement is void and cannot be enforced. Illegality affects the agreement from the outset, so the ordinary remedies available for breach of a valid contract do not arise.

Question 14Regulatory and Legal Framework for Foreign Trade

Under the Sale of Goods Act, 1930, in a contract for the sale of specific goods in a deliverable state, property in the goods passes to the buyer:

  1. Only when the goods are physically delivered to the buyer
  2. Only when the price is paid in full by the buyer
  3. When the seller issues a commercial invoice for the goods
  4. When the contract is made, irrespective of the time of payment or delivery Correct answer.

Explanation

For specific goods in a deliverable state, the Act provides that property passes when the contract is made, and it is immaterial whether the time of payment or delivery, or both, is postponed. The parties may of course agree otherwise, but the statutory default rule is that property passes on contract.

Question 15Regulatory and Legal Framework for Foreign Trade

Under the Negotiable Instruments Act, 1881, a bill of exchange is an instrument in writing containing:

  1. A promise to pay a sum of money to a specified person on demand
  2. An acknowledgement of a debt given by a borrower to a lender
  3. An unconditional order, signed by the maker, directing a certain person to pay a certain sum of money Correct answer.
  4. An instruction to a carrier to deliver goods to the order of the consignee

Explanation

The Act defines a bill of exchange as an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer. A mere promise to pay is a promissory note, not a bill.

Question 16Regulatory and Legal Framework for Foreign Trade

A bank in Pakistan finds that the value of goods declared on an import invoice is significantly above prevailing market prices for the same commodity, and the exporter is a newly formed company in a jurisdiction with weak disclosure rules. Under the anti-money-laundering framework, the bank should:

  1. Report the suspicious transaction to the Financial Monitoring Unit Correct answer.
  2. Advise the importer to revise the invoice and resubmit it for payment
  3. Ignore the matter because the bank's duty is limited to checking the terms of the documentary credit
  4. Refer the case to the trade association of which the importer is a member

Explanation

Over-invoicing of imports is a recognised trade-based money laundering typology, and reporting entities are required to report suspicious transactions to the Financial Monitoring Unit. The bank's obligations are independent of any documentary credit examination and are not discharged by referring the matter to a trade body.

Question 17Regulatory and Legal Framework for Foreign Trade

The registration and regulation of chambers of commerce and trade associations in Pakistan is governed by the:

  1. Companies Act, 2017
  2. Trade Unions Act, 1926
  3. Trade Organizations Act, 2013 Correct answer.
  4. Co-operative Societies Act, 1925

Explanation

The Trade Organizations Act, 2013 provides for the registration, regulation and functioning of trade organizations, including chambers of commerce and industry and sectoral associations. The Companies Act governs companies, while the Trade Unions Act and Co-operative Societies Act govern entirely different forms of organisation.

Question 18Regulatory and Legal Framework for Foreign Trade

The State Bank of Pakistan's Foreign Exchange Manual is best described as:

  1. A compilation of State Bank instructions binding on authorised dealers Correct answer.
  2. A statutory enactment passed by Parliament for the regulation of foreign trade
  3. A schedule of customs duty rates applicable to imported goods and their classification
  4. A set of accounting standards for banks issued by the accounting profession

Explanation

The Foreign Exchange Manual collects the State Bank's instructions, issued under the exchange control law, which Authorized Dealers must observe in handling foreign exchange transactions. It is an administrative compilation rather than a statute, a tariff schedule or an accounting standard.

Question 19Regulatory and Legal Framework for Foreign Trade

The Imports and Exports (Control) Act, 1950 provides the legal basis for:

  1. The issuance of the Import Policy Order and the Export Policy Order Correct answer.
  2. The collection of customs duty at the point of import
  3. The investigation of anti-dumping complaints
  4. The licensing of banks to deal in foreign exchange

Explanation

The Act empowers the Government to control the import and export of goods and is the authority under which the Import Policy Order and Export Policy Order are notified. Customs duty, bank licensing and trade remedy investigations rest on other statutes.

Question 20Regulatory and Legal Framework for Foreign Trade

Under a CIF (cost, insurance and freight) contract, the seller is required to:

  1. Arrange carriage to the agreed destination port and insure the goods for the buyer's benefit Correct answer.
  2. Deliver the goods at the buyer's premises and clear them for import
  3. Bear the risk of loss of or damage to the goods until they reach the buyer's warehouse
  4. Obtain export clearance only, leaving the arrangement of insurance to the buyer

Explanation

In a CIF sale the seller contracts for carriage to the named destination port and obtains insurance cover for the goods in transit for the buyer's benefit, while risk normally passes when the goods are on board the vessel. The buyer bears the risk of the sea voyage despite the seller paying freight and insurance.

Question 21Regulatory and Legal Framework for Foreign Trade

A corporate customer repeatedly imports the same commodity at a declared value far above the price quoted in widely available market sources, and the foreign supplier is a newly formed company in a jurisdiction with weak disclosure rules. From a trade-based money laundering perspective, this most likely indicates:

  1. Over-invoicing used to transfer value out of the country Correct answer.
  2. Under-invoicing used to avoid customs duty
  3. A normal pricing difference caused purely by freight charges
  4. A legitimate hedge against exchange rate movements

Explanation

Declaring an import at a value materially above the true price allows the buyer to remit more foreign exchange abroad than the goods are worth, with the excess retained offshore, which is a classic over-invoicing typology of trade-based money laundering. Freight costs could not explain a value far above market quotations.

Question 22Regulatory and Legal Framework for Foreign Trade

A credit is confirmed by a bank in Pakistan at the request of an issuing bank abroad. If the issuing bank refuses to pay against a presentation that complies with the credit terms, the confirming bank:

  1. May withhold payment until the dispute between the issuing bank and the beneficiary is resolved
  2. Must honour the presentation to the beneficiary and seek reimbursement from the issuing bank Correct answer.
  3. Is liable for only half of the credit amount in such circumstances
  4. Has no obligation because it acts only as an agent of the issuing bank

Explanation

A confirming bank adds its own independent undertaking to honour a complying presentation, so the beneficiary can look to it even if the issuing bank fails to pay. Having honoured, the confirming bank is entitled to reimbursement from the issuing bank but cannot pass the loss to the beneficiary.

Question 23Regulatory and Legal Framework for Foreign Trade

For imported goods, Pakistan's customs law bases the customs value primarily on:

  1. The highest price at which the imported goods could be sold in Pakistan
  2. A fixed value published annually for each tariff heading by the customs administration
  3. The transaction value, that is, the price actually paid or payable for the goods, adjusted as the law provides Correct answer.
  4. The domestic selling price of similar goods produced locally

Explanation

Customs valuation follows the transaction value method, taking the price actually paid or payable for the goods when sold for export to Pakistan, with prescribed adjustments for items such as freight and certain assists. Alternative methods apply only sequentially when the transaction value cannot be determined.

Question 24Regulatory and Legal Framework for Foreign Trade

Under UCP 600, a nominated bank that decides to refuse a presentation must give a single notice of refusal stating each discrepancy. If it fails to give such notice by the close of the fifth banking day following the day of presentation, it is:

  1. Relieved of liability because the issuing bank remains primarily liable
  2. Precluded from claiming that the presentation was not complying Correct answer.
  3. Entitled to extend the examination period by a further five banking days
  4. Required to return the documents without stating any reason

Explanation

UCP 600 provides that a bank that fails to act in accordance with the refusal requirements is precluded from claiming that the documents do not constitute a complying presentation. The refusal must therefore be timely, single and must state every discrepancy relied on.

Question 25Regulatory and Legal Framework for Foreign Trade

Under the Foreign Exchange Regulation Act, 1947, a person in Pakistan who wishes to deal in foreign exchange may do so:

  1. Only with the general or special permission of the State Bank of Pakistan Correct answer.
  2. Freely, provided the amount does not exceed USD 10,000 in a year
  3. Only after obtaining a licence from the Ministry of Commerce
  4. Freely, provided the transaction is reported to Pakistan Customs

Explanation

The Act restricts dealings in foreign exchange and permits them only under a general or special permission of the State Bank, which is given through the Foreign Exchange Manual and circulars and through authorisation of dealers. Reporting to Customs or holding a commerce licence does not create authority to deal in foreign exchange.

Question 26Regulatory and Legal Framework for Foreign Trade

Which enactment is the principal statute under which customs duties are levied and collected on goods imported into and exported from Pakistan?

  1. The Customs Act, 1969 Correct answer.
  2. The Imports and Exports (Control) Act, 1950
  3. The Foreign Exchange Regulation Act, 1947
  4. The Sales Tax Act, 1990

Explanation

The Customs Act, 1969 is the core legislation that provides for the levy and collection of customs duties, the assessment and clearance of goods, and related enforcement powers. Other statutes may impose additional levies at the import stage, but they operate alongside rather than in place of the customs statute.

Question 27Regulatory and Legal Framework for Foreign Trade

Under the Sale of Goods Act, 1930, a stipulation in a contract of sale that is essential to the main purpose of the contract is known as:

  1. A condition Correct answer.
  2. A guarantee
  3. A representation
  4. A warranty

Explanation

Section 12 of the Sale of Goods Act, 1930 distinguishes conditions from warranties by reference to the purpose the stipulation serves. A condition is essential to the main purpose of the contract, so its breach gives the aggrieved party a right to repudiate the contract and claim damages, whereas a warranty is collateral to the main purpose and its breach gives only a right to damages.

Question 28Regulatory and Legal Framework for Foreign Trade

A Pakistani buyer holds a foreign arbitral award made in a New York Convention state against a Pakistani seller who refuses to pay. Under the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, the buyer can ordinarily enforce the award in Pakistan by:

  1. applying to the State Bank of Pakistan for an order directing remittance of the award amount
  2. referring the dispute to the International Court of Justice for a binding direction
  3. filing a fresh suit on the merits of the underlying dispute before a civil court
  4. initiating proceedings in which the award is treated in the same manner as a judgment or decree of a High Court Correct answer.

Explanation

The 2011 Act gives effect in Pakistan to the New York Convention and provides that a foreign arbitral award may be relied upon and enforced as if it were a judgment or decree of a High Court. Objection to enforcement is confined to the limited grounds recognised by the Convention, such as incapacity, lack of proper notice, or conflict with public policy.

Question 29Regulatory and Legal Framework for Foreign Trade

A credit issued subject to UCP 600 expressly states that it is 'transferable'. Which statement correctly reflects the UCP 600 position on transfer of that credit?

  1. It may be transferred only with the consent of the confirming bank and may be transferred twice.
  2. It may be transferred only in whole and never in part.
  3. It may be transferred once only, and the second beneficiary cannot transfer it further. Correct answer.
  4. It may be transferred any number of times provided each transfer is advised through a bank.

Explanation

Under UCP 600 a credit can be transferred only if it is expressly designated as transferable, and it may be transferred only once, so the second beneficiary has no power to transfer it onward. The credit may nevertheless be transferred in part, provided partial drawings or shipments are not prohibited.

Question 30Regulatory and Legal Framework for Foreign Trade

An importer's appeal against an assessment is decided against it by the Collector (Appeals) under the Customs Act, 1969. The next statutory remedy ordinarily available to the importer is:

  1. a revision application to the Federal Board of Revenue
  2. an appeal directly to the State Bank of Pakistan
  3. an appeal to the Customs Appellate Tribunal within the prescribed period Correct answer.
  4. a fresh reference to the customs officer who made the original assessment

Explanation

The Customs Act, 1969 provides a graded appellate structure: an aggrieved person first approaches the Collector (Appeals), and an order of that authority is appealable to the Customs Appellate Tribunal within the prescribed period. Recourse to constitutional jurisdiction is generally available only after the statutory remedies are exhausted.

Question 31Import Operations and Documentation

Which transport document serves as a document of title and can be transferred to another party by endorsement?

  1. Air waybill
  2. Packing list
  3. Ocean bill of lading Correct answer.
  4. Railway consignment note

Explanation

An ocean bill of lading performs three functions: it evidences the contract of carriage, acts as a receipt for the goods shipped, and represents title to the goods. When made out to order it is negotiable, so the holder can transfer rights to the goods by endorsement and delivery.

Question 32Import Operations and Documentation

Under Incoterms 2020, at what point does risk pass from seller to buyer under FOB?

  1. When the goods are handed over to the first carrier at origin
  2. When the goods are placed alongside the ship at the port
  3. When the goods are loaded on board the vessel Correct answer.
  4. When the goods are delivered at the named port of destination

Explanation

FOB requires the seller to deliver the goods on board the vessel nominated by the buyer at the named port of shipment, and risk passes at that moment. The buyer then bears all costs and risks of the main carriage and import formalities.

Question 33Import Operations and Documentation

Which shipping document is normally used by customs authorities as the primary basis for establishing the declared value of imported goods?

  1. Certificate of origin
  2. Bill of lading
  3. Packing list
  4. Commercial invoice Correct answer.

Explanation

The commercial invoice states the price actually paid or payable for the goods and describes them, so customs valuation is built on it. Other documents support or corroborate the transaction but do not state the price.

Question 34Import Operations and Documentation

The payment undertaking of an issuing bank under a documentary credit is:

  1. Enforceable only against the applicant and not the bank
  2. Independent of the underlying sale contract Correct answer.
  3. Dependent upon the quality of the goods actually shipped
  4. Conditional upon the applicant accepting the goods on arrival

Explanation

A credit is a separate transaction from the sale or other contract on which it may be based, and banks are in no way concerned with or bound by that contract. The bank's obligation is triggered by presentation of complying documents, not by the condition of the goods.

Question 35Import Operations and Documentation

An air waybill differs from an ocean bill of lading mainly in that it:

  1. Is not a document of title and is non-negotiable Correct answer.
  2. Serves as a document of title endorsed to order
  3. Cannot be used as evidence of the contract of carriage
  4. Must always be issued in a full set of three originals

Explanation

Because air cargo normally arrives before the documents, an air waybill is made out to a named consignee and is neither negotiable nor a document of title. It still evidences the contract of carriage and serves as a receipt for the goods.

Question 36Import Operations and Documentation

Which document certifies the country in which imported goods were produced and supports a claim to preferential tariff treatment?

  1. Consular invoice
  2. Inspection certificate
  3. Insurance certificate
  4. Certificate of origin Correct answer.

Explanation

A certificate of origin is issued or authenticated by a competent authority and declares the country of manufacture or production of the goods. Customs authorities rely on it to decide whether a preferential rate under a trade agreement applies.

Question 37Import Operations and Documentation

A packing list accompanying an import shipment is primarily used to:

  1. Prove that freight charges have been paid
  2. Identify the contents of each package Correct answer.
  3. Establish the origin of the goods for customs
  4. Transfer title of the goods to the buyer

Explanation

A packing list itemises the packages, their marks and numbers, contents, weights and dimensions so that the carrier and customs can verify the consignment. It supplements the commercial invoice and is not a title or payment document.

Question 38Import Operations and Documentation

In a documentary collection, the party on whom a bill of exchange is drawn is known as the:

  1. Drawer
  2. Endorser
  3. Drawee Correct answer.
  4. Remitting bank

Explanation

The exporter who issues the bill is the drawer, and the party ordered to pay it is the drawee, which in an import collection is normally the importer. The collecting bank presents the bill to the drawee for payment or acceptance.

Question 39Import Operations and Documentation

Under UCP 600, how long does a nominated bank have, following the day of presentation, to determine whether a presentation is complying?

  1. Five banking days Correct answer.
  2. Ten calendar days
  3. Three banking days
  4. Seven banking days

Explanation

UCP 600 allows a maximum of five banking days following the day of presentation to examine a presentation and decide whether it complies. This period is not extended by any rule of the credit and does not depend on the expiry date.

Question 40Import Operations and Documentation

A credit stipulates a quantity of 'about 500 metric tons'. Under UCP 600, the quantity that may be shipped lies between:

  1. 490 and 510 metric tons
  2. 450 and 550 metric tons Correct answer.
  3. 500 and 525 metric tons
  4. 495 and 505 metric tons

Explanation

The expressions 'about', 'approximately', 'circa' or similar, when used with an amount, quantity or unit price, are interpreted as permitting a tolerance of up to 10 per cent more or 10 per cent less. Ten per cent of 500 is 50, so the range runs from 450 to 550 metric tons.

Question 41Import Operations and Documentation

Under Incoterms 2020 CIF, which obligation is placed on the seller?

  1. Paying the import duties and taxes at destination port
  2. Bearing the risk of loss until the goods reach destination port
  3. Arranging and paying for carriage and insurance to destination Correct answer.
  4. Unloading the goods from the vessel at the destination port

Explanation

CIF requires the seller to contract and pay for carriage to the named destination port and to obtain minimum cargo insurance cover for the buyer's benefit. Risk, however, passes when the goods are on board at the port of shipment, and discharge and import clearance remain the buyer's responsibility.

Question 42Import Operations and Documentation

Under Incoterms 2020, the rule that obliges the seller to clear the goods for import and pay import duty is:

  1. DDP Correct answer.
  2. CPT
  3. FCA
  4. DAP

Explanation

DDP places the maximum obligation on the seller, including carrying out and paying for import clearance formalities, duties and taxes. DAP is identical except that import clearance and duty remain with the buyer.

Question 43Import Operations and Documentation

Which document is filed with customs by the carrier or its agent at the port of discharge, listing all cargo carried on board a vessel?

  1. Shipping bill filed by the exporter
  2. Bill of entry lodged by the importer
  3. Import general manifest Correct answer.
  4. Delivery order issued by the carrier

Explanation

The import general manifest is the carrier's declaration of the entire cargo on board, filed on arrival so that customs can reconcile discharged goods against declared consignments. Individual importers then file their own declarations to clear their consignments.

Question 44Import Operations and Documentation

In Pakistan, the declaration lodged by an importer or a licensed clearing agent for the clearance of imported goods is called the:

  1. Bill of entry Correct answer.
  2. Shipping bill
  3. Import general manifest
  4. Bill of lading

Explanation

The bill of entry, now filed electronically through the customs clearance system, declares the description, value, classification and duty payable on the imported goods. Assessment and release of the consignment proceed on the basis of that declaration.

Question 45Import Operations and Documentation

Under Pakistan's foreign exchange regulations, which document must an importer obtain from an authorised dealer before remitting payment for imports?

  1. Electronic Import Form Correct answer.
  2. Export form
  3. Form 'E'
  4. Inland letter of credit

Explanation

Import remittances must be supported by an Electronic Import Form generated through the banking and customs systems, which links the payment to a specific consignment. Banks are required to verify the form and the underlying shipping documents before releasing foreign exchange.

Question 46Import Operations and Documentation

In a documentary collection handled on 'documents against acceptance' terms, the collecting bank releases the documents to the importer when the importer:

  1. Accepts the usance bill of exchange Correct answer.
  2. Pays the full invoice value in cash to the collecting bank
  3. Completes the customs clearance of the goods at the port
  4. Provides a bank guarantee covering the full invoice value

Explanation

Under documents against acceptance the importer obtains the documents by accepting a term bill of exchange, promising to pay at maturity. Payment is deferred, which is precisely what distinguishes D/A from documents against payment.

Question 47Import Operations and Documentation

Which set of Institute Cargo Clauses gives the widest cover for imported cargo?

  1. Institute Strike Clauses (Cargo)
  2. Institute Cargo Clauses (A) Correct answer.
  3. Institute Cargo Clauses (C)
  4. Institute Cargo Clauses (B)

Explanation

The (A) clauses are drawn on an all-risks basis subject only to the general exclusions, so they offer the broadest cover of the three standard sets. Clauses (B) and (C) operate on named-perils lists, with (C) the narrowest.

Question 48Import Operations and Documentation

In the Incoterms 2020 revision, the former rule DAT was replaced by:

  1. DPU Correct answer.
  2. CPT
  3. DDP
  4. DAP

Explanation

DAT (Delivered at Terminal) was renamed DPU (Delivered at Place Unloaded) so that delivery can occur at any place, not only a terminal, and so that the unloading obligation of the seller is explicit in the rule's name.

Question 49Import Operations and Documentation

The Harmonized System, whose six-digit codes are used to classify imported goods, is maintained by the:

  1. International Chamber of Commerce
  2. World Trade Organization
  3. World Customs Organization Correct answer.
  4. International Maritime Organization

Explanation

The World Customs Organization administers the Harmonized Commodity Description and Coding System, which countries adopt and then extend with national tariff lines. The six-digit code is uniform internationally, while later digits are set nationally.

Question 50Import Operations and Documentation

Under UCP 600, when a credit requires insurance cover but does not state the amount, the minimum insured value must be:

  1. 110% of the CIF or CIP value Correct answer.
  2. 100% of the commercial invoice value
  3. 120% of the FOB value of the goods
  4. 100% of the CIF value of the goods

Explanation

UCP 600 requires cover of at least 110 per cent of the CIF or CIP value of the goods where the credit is silent on the amount. The extra 10 per cent is intended to cover the buyer's expected profit and incidental costs.